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Why Are There So Many MVNO’s?

So Many MVNOs

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A few years ago, a wireless cohort and I sat down and researched just how many MVNO’s were operating in the United States. We came up with 171 at the time. On each instance of one MVNO failing or another MVNO launching, he would call me and say, “there are now 168 MVNOs” or “we now count 173 MVNOs!” I’m sure that most of us couldn’t name twenty-five of them off the top of our heads but believe me, they are not only out there operating but making money as well.

There is now a new explosion of MVNOs entering the market, both traditional and those on a new playing field that is being expanded by the growth of IoT (The Internet of Things). It’s safe to say that we have seen the traditional MVNO model of buying from the carriers and offering Unlimited Talk & Text and some sort of data bucket to consumers to a Business to Business (B2B) play where companies and enterprise accounts need to have faster than immediate access to data and information so they can effectively run their business and stay ahead of the competition. I have written in this space about differentiation and distribution; now it’s time for MVNOs to embrace the growing B2B business and work with these customers to provide specialized solutions for their ever-changing needs.

Work With Your Carrier

The Big Three Carriers have already given you access to their networks. Whether you are a full-blown MVNO or an “MVNO-Lite,” your infrastructure costs are minimal. Remember, you don’t own the network, you simply buy or rent minutes of use or GB of data. Where you must be different is in the value-added services you offer. Too many MVNOs are using price only and the “race to the bottom” will be hard to recover from for most of the traditional MVNOs. All you have to do is look at the Black Friday advertising to see how low some are willing to go, led of course by Cricket, Boost, and Metro by T-Mobile. And now that Verizon owns Tracfone, maybe we will start to see price stabilization in the prepaid space. Verizon, which now is the largest prepaid carrier in the United States didn’t spend $7 billion to see its newfound market share become unprofitable.

Ask your carrier to help you develop innovative B2B offerings to compliment your current consumer strategy. One way to find new opportunities is to look at what some of the new entrants are already doing:

  • Better Customer Service
  • New Vertical Markets (IoT and Big Data related)
  • Better Handsets (and Handset/Device Management Tools)
  • Machine to Machine (M2M) Offerings
  • Secure Networks on Both the Device and the Service

We Were Here First!

One thing that you, the current MVNOs, have as an advantage is years of experience running your business in alignment with your underlying carriers. The old adage of becoming an MVNO by simply, “jumping on in, the water’s fine,” will be a wake-up call for those who do not have a telecom background. Wireless customers as you know are demanding and if you don’t provide value and give them the best experience, they will simply, and rightfully so, leave and go to another brand.

There are also the whole behind-the-scenes activities of customer service, billing, regulatory issues, and a whole host of other items that you are most likely experts in by now and that will be new to these non-wireless players. You could exploit this weakness or, better yet, partner with them on a consulting or shared services arrangement to add revenue to your company while assisting them on their entre’ into our comfort zone. Be specific in what you can and will provide and make sure you get a long-term agreement to assist them on an ongoing basis. I’m betting that you will learn from each other and complement each other with your own strengths and weaknesses.

Don’t Ignore the Coming MVNO Blitz

It would be unwise for any of our current MVNOs to think that by remaining true to their current business model, they will sustain themselves going forward in the future. Sure, we may have another year or two on this gravy train but if you haven’t seen the MVNO changes coming, let me tell you where to look.

I recently attended (virtually) the MVNOs World Digital Symposium 2021 in mid-November. Keynotes and panel discussions were held on everything relating to MVNOs now and for the future. From the subjects outlined above; IoT, 5G, etc. and the opportunities for newcomers and incumbents, it was well worth the two days of learning, I posted the agenda and key speakers on my LinkedIn account and highly recommend that you listen to these types of events as they become available.

Don’t be surprised when household name companies start becoming MVNOs. They will experience the same growing pains and ups and downs that you did. Remember, we have a head start and understand the wireless and mobile businesses better than anyone. Use this knowledge to keep ahead of the newcomers or find a way to work with them.

I recently spoke with Darren Sadana, CEO of Choice IoT (www.choiceiot.com). Darren has transformed his traditional wholesale/master dealer business to now include a division that enlists solution providers to sell IoT and wireless connectivity where B2B customers are demanding it. The major issue he sees for new entrants to the market is PTCRB certification which ensures that devices are in compliance with cellular network standards and capable of interoperability with a mobile network. Integrated devices include PTCRB-certified modules and include smartphones, tablets, connected vehicles, medical devices, and many more. This could be a long process and companies that are new to wireless may have to spend 6-8 months for a potential solution to receive certification. Choice IoT can streamline this process for obtaining both PTCRB and Carrier certification for your IoT devices.”

Remember, you are already in the market, aligned with a carrier that has already gone through this certification process, and again, you have a head start in going after B2B space. You need to make the most of the opportunities that are there for you today!

Let’s discuss how you might uncover new markets to serve or how to refine some of the processes you use by looking at areas for improvement. Atrium Unlimited Consulting is always ready to assist you. I hope we hear from you soon.

Good Selling!

Jon



Jon Horovitz has been in the wireless industry as a senior executive for 31+ years. He headed up sales and operations in leadership roles for McCaw Communications, AT&T Wireless, Nextel, Boost Mobile, and Sprint. He has owned an MVNO as well as assisted in the start-up of three others. His consulting company, Atrium Unlimited, LLC advises carriers, MVNOs, investment bankers, and venture capitalists interested in joining the wireless space. Jon would love to hear from you about any consultative needs you may have. Please visit https://AtriumUnlimited.com



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